Econometrica: May 1976, Volume 44, Issue 3

Taxes in a Labor Supply Model with Joint Wage-Hours Determination

https://doi.org/0012-9682(197605)44:3<485:TIALSM>2.0.CO;2-0
p. 485-507

Harvey S. Rosen

Using cross-section data on white married women for the year 1967, a model of labor supply which permits statistical estimation of a "coefficient of tax perception" is studied. The model allows for the possibility that the wage may depend upon the number of hours worked. The results suggest that marginal tax rates have an important impact on labor market behavior.
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